The costs of adoption vs. surrogacy

Jimmy Fallon is bursting at the seams over his baby girl, Winnie, who was born via a surrogate to him and his wife, Nancy Juvonen, in late July. And let's not forget about Giuliana and Bill Rancic's nearly 1-year-old, Duke, also born via a surrogate. From surrogates to adoption, there's a baby boom happening in Hollywood. Unfortunately, these routes aren't as easy for those who don't have that star paycheck to pay for it.

While it seems like it might be an easy alternative, the reality, of course, is more complicated and expensive. Hopeful couples discover that adoption or gestational surrogacy costs from tens of thousands of dollars to more than $100,000. (And that's on top of the thousands of dollars many have already shelled out on fertility treatments, to say nothing about the emotional toll.)

Financing options are available -- from grants to loans to companies willing to foot part of the bill -- but these are few and far between and usually don't make up the entire cost of adding a child to a family.

Here is a breakdown of the costs of surrogacy and adoption while explaining the financing that might be available for those couples who have difficulty having their own children naturally.

Gestational surrogacy: Up to $100,000-plus

Gestational surrogacy is when a woman carries a baby to term for a couple. The gestational surrogate or carrier doesn't donate her own egg, so she's not biologically related to the child she carries. Rather, the egg and sperm come from the couple or from a donor egg and/or sperm.

"The costs vary based on what the intended parents need," says Scott Buckley, director of legal services at Circle Surrogacy, an agency specializing in matching gestational surrogates with intended parents. "If you need a sperm, egg and uterus, it can cost $120,000."

Buckley says the overall costs can be between $80,000 to $100,000 if the couple can donate their own eggs or frozen fertilized embryos. These involve fees to the agency, gestational carrier, attorney and social worker, along with legal and medical costs and money to cover the carrier's maternity wardrobe and travel expenses. It also includes the costs of harvesting the egg or embryo.

"We advise that couples have 10 (percent) to 20 percent extra set aside just in case something comes up," says Buckley. Such incidentals include paying the gestational surrogate for any lost wages if she is put on bed rest or day care costs for her other children, Buckley says.

Finding $100,000 isn't easy, so it's no wonder there are specific loans available to help fund gestational surrogacy. The agency is the best place to start looking for financing. The largest surrogacy agency, Growing Generations, offers a financing program up to $100,000 for its clients at rates that compare to second mortgages or equity lines of credit, the company says.

Other specialty medical loans up to $30,000 are available from a company called MedicalFinancing.com, says Buckley. Otherwise, potential parents typically turn to unsecured loans, home equity loans, credit cards and lines of credit from their banks, Buckley says.

Instead of using an agency, would-be parents can also hire an attorney who's experienced in gestational surrogacy. But the total cost isn't much different from that of an agency. It could take more time if the attorney needs to locate a carrier by putting ads in local newspapers and penny-savers. But some attorneys already have a list of potential carriers, as do agencies.

Of course, cutting out the middleman -- in this case, the agency or attorney -- could cut costs greatly.

For example, Natasha Tabori Fried of New York emailed friends and family, asking if they knew someone who would be a surrogate. A family friend's wife in Vancouver volunteered. Because Canada bans paying surrogates, the woman asked for a gift instead -- a family vacation for her son's graduation, around $5,000 total (much less than the $20,000 to $35,000 carriers receive through agencies or attorneys).

Unfortunately, the fertilized egg didn't take, and the arrangement ultimately didn't work out, but Fried's experience highlights the potential success of reaching out.

International adoption: $25,000 to $50,000

Madonna did it and so has Angelina Jolie ... three times so far. Even characters on prime-time comedies have done it (think Cam and Mitchell from "Modern Family"). International adoption has become mainstream in the U.S. but still comes with a hefty price -- up to $50,000 depending on the country and child, and it can take up to three years to finalize.

"It's expensive," says Susan Soonkeum Cox, vice president of policy and consumer affairs at Holt International adoption agency. "People are usually very surprised by how much it is to adopt internationally."

The total covers the agency application fee, a home study fee (where a social worker makes sure your home and family are ready for a baby), background checks, processing fees, a program fee (which includes the agency's fee and the "donation" the foreign country requires), travel costs, and fees for post-placement and adoption finalization.

Some countries require a smaller donation fee, which often funds the country's orphanage system. For example, Mongolia, Uganda and the Philippines charge less than $10,000, while Korea requires nearly double that. These fees can be waived or reduced if parents adopt a special-needs child or an older child, says Cox.

To get your money's worth, go through a full-service agency that is approved in the U.S. and in the country from which the baby is being adopted, recommends Sarah Gerstenzang, executive director of New York State Citizens' Coalition for Children. A reputable agency will charge a family on a sliding scale based on income, she says.

"A good agency will sit down with their clients and tell them how much money they have to spend and where each dollar is going," Gerstenzang says. "You should have a social worker who will be your advocate and explain every step."

Financing for international adoption is also available. The Oxford Adoption Foundation offers adoption loans for couples adopting internationally, while A Child Waits Foundation offers grants and loans. The National Adoption Foundation offers loans, an adoption credit card and grants for all types of adopting families. The ABBA Fund and Lifesong Legacy Fund provide interest-free loans to Christian couples who are adopting. Lifesong Legacy also provides matching grants. Your adoption agency may be affiliated with grant or loan programs, so don't forget to ask.

Check all eligibility requirements and application deadlines before applying for a grant or loan. Many organizations require families to pass a home study before accepting an application.

The financial help doesn't stop there. Families can seek a federal tax credit of up to $6,000 per adopted child this year. The credit is available in the year the adoption is finalized. Some states also provide adoption fee reimbursements. Contact a local tax preparer or your state's tax department to find out more. Military service members can also be reimbursed for certain adoption costs, up to $2,000 per child each year.

Your employer might offer assistance as well. The Dave Thomas Foundation for Adoption (created by the Wendy's restaurant chain founder) offers an annual list of the most adoption-friendly workplaces. Wendy's topped the list in 2012 by offering up to $25,300 in financial aid and six weeks of paid adoption leave. Ferring Pharmaceuticals, RBS Citizens Financial Group, HanesBrands and Barilla America rounded out the top five. Of the 1,000 employers surveyed by the foundation, more than half offered some kind of financial adoption benefit.

Don't forget about family when it comes to adoption costs. Ask your loved ones to help fund your adoption. AdoptTogether.org is a nonprofit funding program that helps couples raise cash for adoption expenses. Families create adoption profiles that show how much they need to raise. Family, friends, co-workers, fellow church members and more can make a tax-deductible donation to the family's adoption dream.

Private domestic adoption: $20,000 to $35,000

For those looking to adopt a baby but who don't want to fly around the world to adopt one, private domestic adoption is a comparable and sometimes cheaper option, with costs ranging from $20,000 to $30,000. The time it takes from start to finish can be shorter, too -- around a year.

"There's a lot of misconception about domestic adoption," says Fried, a mother of an adopted son in New York. "(People will say) 'You wait years to get a baby,' or, 'You don't get a baby at all.' It's just not true."

The process starts with finding an attorney or agency that specializes in private domestic adoptions and is licensed in your home state. Agencies often have relationships with health clinics, hospitals and prisons to find pregnant mothers who want to give up their babies for adoption. Attorneys often post ads online, in newspapers or penny-saver advertisements to find prospective birth mothers. Think of the movie "Juno."

The total cost includes an application fee, the agency fee (which is the bulk of the fee), a home visit and background checks, the birth mother's expenses (each state has limits on how much you can pay), medical expenses, a rematch fee (if the potential parents decline a baby), a termination rights fee, and a father's termination rights fee.

Other expenses may include travel costs to where the biological mother gives birth, attorney fees if working with an agency and medical insurance. In Fried's case, Medicaid covered the birth mother.

Fried also says that some agencies offer a different fee structure based on the race of the baby because some infants are harder to place with families.

Private adoption funding can also be found. The Adoption Network Law Center offers loans for families adopting newborns in the U.S. The National Adoption Foundation also offers loans, an adoption credit card and grants for all types of adopting families. For Christian couples looking to adopt, the ABBA Fund and the Lifesong Legacy Fund offer interest-free loans and matching grants. Your adoption agency may also be affiliated with a grant or loan program.

Before you apply for a grant or loan, make sure to check all the eligibility requirements and application deadlines. You'll likely be required to pass a home study before applying.

The federal government offers some relief, too. There's a $6,000 tax credit per adopted child this year. The credit is available in the year the adoption is finalized. And some states provide adoption fee reimbursements. Contact your state's tax department or a local tax preparer to find out more. Military service members can be reimbursed for certain adoption costs up to $2,000 per child each year.

Some employers can foot part of the adoption bill, too. The Dave Thomas Foundation for Adoption offers an annual list of the most adoption-friendly workplaces. (See the second tab, on international adoption, for more information.)

Last, families can create a profile on AdoptTogether.org, a nonprofit funding program that helps couples raise money for adoption expenses. Loved ones can make a tax-deductible donation to the family's adoption dream.

Foster care adoption: Virtually no cost

While it's often overlooked, the most affordable way to bring a child into your home is adopting through the foster care system. It's not unheard of, even among the wealthy stars of Hollywood. Sandra Bullock reportedly adopted her infant son, Louis, from the Louisiana State Foster Care System in New Orleans.

"It's the least expensive way to adopt," says Emily Rosen, a licensed clinical social worker and adoption specialist in New York. "The state will give money to the family that is adopting for food, medical insurance, (and) a stipend to buy clothes and schoolbooks."

The only possible out-of-pocket expense is the cost of the home study, which runs between $300 and $500 for foster care adoptions. If the state agency doesn't waive the fee, it's typically reimbursed after the adoption is completed, according to the U.S. Department of Health & Human Services.

However, there is a reason some parents shy away from foster adoption. The chances are high that you might not get a healthy baby. There's usually a long line of potential parents waiting for an infant in good health and who's available for adoption. (Bullock's adoption of baby Louis took four years.) Many of the babies and toddlers in foster care have developmental delays or special medical needs, while most of the healthy children are older.

If your home is open to children with special needs, the state usually will cover costs for medical treatment, in-home care or therapy to help with developmental problems.

Families adopting from foster care also are eligible for federal and state tax credits or reimbursements. There's a $6,000 federal tax credit per adopted child this year. (Check out the third tab, on private domestic adoption, for more information.)

Janna Herron covers credit cards, credit reporting and scoring and other personal finance topics for Bankrate.com. She has appeared as a content expert on local ABC, CBS, NBC and Fox affiliates along with several radio stations nationwide. She also has been quoted by MSNBC.com, CNNMoney, the Los Angeles Times and the Detroit Free Press among other news outlets. Connect with Janna Herron on Google+.

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